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« The Accumulator Trade 2 Update 06 April 2011 | Main | Tops 7000 Subscribers »

Silver prices Up 2.06% Today

silver chart 05 April 2011.JPG

As we can see from the above chart this has been a sparkling rally by silver as prices added 2.06% today. The technical indicators are firmly in the overbought zone with the RSI standing at 74.53 suggesting that a breather could be in the wind. However, demand remains strong with the $40.00/oz level just ahead of us. We may get some big wobbles at this point after all silver prices have come a long way in a short time, ask any silver bear.

The following comments were taken from an article on Marketwatch, written by Myra P. Saefong:

Silver for May delivery (SIK11 3,866, +16.60, +0.43%) climbed 76 cents to settle at $38.49 an ounce, the latest in a string of 31-year highs.

The metal had bounced off $38 an ounce in recent weeks. As it broke through that ceiling, more investors came to the market in hopes of $40 an ounce in the short term, said Jeffrey Christian, managing director of commodities consulting firm CPM Group in New York.

Silver past $38 is “very expensive,” he added. The average cost of metal at primary silver mines was $5.06 an ounce last year, four times what silver futures averaged in 2010, Christian said.

Production costs for most of silver being sold are even lower as the majority of the metal in the market comes as a byproduct of gold and copper mining, he added.

Spot silver traded at $50.35 an ounce in mid-January 1980 according to CME Group, which owns Comex.

Gold had a more muted performance but prices are well supported all the way down to a range of $1,410-$1,415 an ounce, said Andrey Kryuchenkov, an analyst at VTB Capital in London.

Gold futures had lost $11 the previous session after closing at a record high of $1,439.90 Thursday.

At current prices, however, physical buyers are sitting out, he said. Their buying on the dips, however, will continue to sustain the uptrend for gold, Kryuchenkov said.

The gains in gold and silver “have possibly set the tone for the week, with both metals again rising on safe-haven and inflation hedging after [West Texas Intermediate crude oil recently] touched a fresh 2½-year peak,” analysts at TheBullionDesk said in an overnight note to clients.

Crude oil shook an early weakness to return to its best since September 2008. The May contract added 30 cents, or 0.3%, to $108.24 a barrel on the New York Mercantile Exchange.

It traded as high as $108.78 in overnight electronic trading. Last week, prices gained 2.4%. Read more about oil prices Monday.

The dollar index (DXY 76.02, +0.11, +0.14%), a measure of the U.S. currency against a basket of major rivals, was weaker earlier but at last check gained to 75.944 from 75.857 in North American trade late Friday.

Weakness in the dollar is generally positive for gold and other commodities as it makes them cheaper for holders of other currencies.

The week is likely to include focus on interest rates, “with the [European Central Bank] likely to increase interest rates, and renewed speculation as to whether the Federal Reserve will attempt to increase interest rates or embark on” a third round of quantitative easing, wrote analysts at GoldCore in a note to clients.

And “rising interest rates will be bullish for gold and silver as they were in the 1970s,” they said.

Hang on in there, we have waited a long time for the silver bull market to unfold and it is unfolding with some pizzazz right in front of us.

Keep smiling you are a silver bug.


Over in the Options pit, our model portfolio has managed an average return of 41.23% per trade, 68 closed trades, 66 closed at a profit, or a 97% success rate. Average trade open for 42.76 days.

SK Chart with profits re-invested 29 March 2011.JPG

The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today, before we decide to cap membership.

Stay on your toes and have a good one.

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